PRELIMINARY STATEMENT. 1. Medicaid recipients with disabling and chronic health conditions bring this suit to

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ---------------------------------------------------------------------------x JANIE TAYLOR; EDDY LEMIEUX by his NEXT FRIEND MARIE LADINY; and ANIBAL SANTIAGO by HIS NEXT FRIEND DENISE RIVERA, individually and on behalf of all others similarly situated, Plaintiffs, -against- HOWARD ZUCKER, as Acting Commissioner of the New York State Department of Health; KRISTIN M. PROUD, as Commissioner of the New York State Office of Temporary and Disability Assistance, Defendants. --------------------------------------------------------------------------x CLASS ACTION COMPLAINT PRELIMINARY STATEMENT 1. Medicaid recipients with disabling and chronic health conditions bring this suit to challenge the lack of basic due process protections when their Medicaid home care services are actually or threatened to be denied, reduced or terminated by the New York State Department of Health ( DOH ). 2. Plaintiffs JANIE TAYLOR, EDDY LEMIEUX, and ANIBAL SANTIAGO bring this class action for injunctive and declaratory relief, on behalf of themselves and a class of all current and future Medicaid recipients in New York State who receive home care services through Medicaid Managed Care Organizations and who have suffered or will suffer threatened or actual denials, reductions, or terminations of their home care services without timely and adequate notice, and / or without any change in their condition or circumstances which would

justify a reduction or termination, and/or without aid-continuing benefits pending internal appeals and the issuance of Decisions After Fair Hearings ( DAFHs ). 3. Defendant Zucker has contracted with Medicaid Long Term Care plans ( MLTCs ) and Mainstream Managed Care plans ( MMCs ) (collectively Managed Care Organizations ( MCOs )) to provide home care services to most Medicaid recipients in New York State who need such services. Home care services as used herein refers to Medicaid personal care, home health, private duty nursing, and other long-term care services. 4. Because Defendants Zucker and Proud (collectively State Defendants ) must provide timely and adequate notice, aid-continuing, and the right to a fair hearing to any recipient who is threatened with or suffers any adverse action, the contracts require the MCOs to comply with all applicable federal and state laws and regulations. Named Plaintiff Janie Taylor receives her home care from VNS Choice; Named Plaintiffs Eddy Lemieux, and Anibal Santiago receive their home care through Health First. 5. Plaintiffs challenge the custom and practice of Defendant ZUCKER of (a) threatening to reduce or terminate, and actually denying, reducing, or terminating home health services without first providing timely and adequate notice of such adverse actions and an opportunity for a fair hearing in violation of Plaintiffs rights under 42 U.S.C. 1396a(a)(3); 42 C.F.R. 438.10; 438.210(b),(c), and (d), 438.400-410; 431.211 ; New York Social Services Law 22(12); 18 N.Y.C.R.R 505.14(b)(5)(v)(c) and 358-2-2, 358-2.23, and 358-3.3; and the Due Process Clauses of the 14th Amendment to the United States Constitution, U.S. Const. Amend. XIV, 1; and of the New York State Constitution, N.Y. Const. Art. I, 6; and 2

(b) reducing and terminating home care services when there has been no change in the recipient s condition or circumstances that would justify the reduction or termination in violation of Plaintiffs rights under the Due Process Clause of the 14th Amendment to the United States Constitution, U.S. Const. Amend. XIV, 1, 42 CFR 438.210(a), and as specifically set forth in Mayer v. Wing, 922 F.Supp. 902, and State Defendant s own regulations at 18 N.Y.C.R.R. 505.14 (b)(5)(v)(c); and 6. Plaintiffs challenge the custom and practice of Defendant Proud of failing to authorize aid-continuing where required and of Defendant Zucker in not providing aidcontinuing when authorized, in violation of Plaintiffs rights under 42 U.S.C. 1396a(a)(3); 42 C.F.R. 438.420, 438.424 ; New York Social Services Law 365-a(8); New York Social Services Law 22(12); 18 N.Y.C.R.R 358-3.6; and the Due Process clauses of the 14th Amendment to the United States Constitution, U.S. Const. Amend. XIV, 1, and of the New York State Constitution, N.Y. Const. Art. I, 6; and 7. Plaintiffs challenge Defendant Zucker s custom and practice of denying, reducing and terminating Plaintiffs home care services, by sending inadequate and untimely notices, or no notices at all, and of State Defendants custom and practice of failing to provide an opportunity for a fair hearing with aid continuing, both of which threaten to result in the unnecessary institutionalization of Plaintiffs, in violation of their right to receive services in the most integrated setting appropriate to their needs as guaranteed by Title II of the Americans with Disabilities Act, 42 U.S.C. 12131, et seq.; 28 C.F.R. 35.130 (d); Section 504 of the Rehabilitation Act, 29 U.S.C. 794; 28 C.F.R. 41.51 (d); and 45 C.F.R. 84.4(b)(2). 3

JURISDICTION AND VENUE 8. Jurisdiction over this action is conferred upon this Court by 28 U.S.C. 1331, 1343 and 1367. This action is authorized by 42 U.S.C. 1983 as an action seeking redress of the deprivation of statutory and constitutional rights under color of law; and the Americans with Disabilities Act, 42 U.S.C. 12117. 9. Venue is proper in the Southern District of New York pursuant to 28 U.S.C. 1391(b) in that it is the judicial district in which a substantial part of the events giving rise to the claims occurred. PARTIES 10. Plaintiff JANIE TAYLOR is an 84 year-old woman who lives alone in Manhattan. Ms. Taylor suffers from numerous medical conditions including a mobility impairment and requires home care services in the amount of 10 hours per day, 7 days per week in order to live safely in the community. 11. Plaintiff EDDY LEMIEUX is an 18 year-old man who lives with his aunt and uncle in Brooklyn. Because of his serious medical conditions, he requires 24 hour-per-day continuous care in order to live safely in the community. 12. Plaintiff ANIBAL SANTIAGO is a 65 year-old man who lives alone in Manhattan. Mr. Santiago suffers from numerous medical conditions including diabetes, high blood pressure, and Schizoaffective disorder and requires home care services in the amount of 12 hours per day, 7 days per week. 13. Defendant HOWARD ZUCKER is the Acting Commissioner of the New York State Department of Health ( DOH ), and as such is responsible for the administration of the Medicaid program in the State of New York. He maintains an office at Corning Tower, Empire 4

State Plaza, Albany, New York. He has contracted with over forty Managed Care Organizations, which act as his agents for the purpose of providing home care services. 14. Defendant KRISTIN M. PROUD is the Commissioner of the New York State Office of Temporary and Disability Assistance ( OTDA ) and as such is responsible for the operations of the Office of Fair Hearings, including but not limited to ensuring compliance with Aid Continuing Directives, scheduling and conducting Fair Hearings, issuing recommended decisions after Fair Hearings, and ensuring compliance with Fair Hearing decisions involving the Medicaid program. She maintains an office at 40 North Pearl Street, Albany, New York and at 14 Boerum Place, Brooklyn, New York. CLASS ACTION ALLEGATIONS 15. Named Plaintiffs Eddy Lemieux, Janie Taylor and Anibal Santiago bring this action, pursuant to Rule 23(a) and (b)(2) of the Federal Rules of Civil Procedure, on behalf of themselves and as representatives of a class of: All current and future Medicaid recipients in New York State who receive home care services through Medicaid Managed Care Organizations and who have suffered or will suffer threatened or actual denials, reductions, or terminations of their home care services without timely and adequate notice, and / or without any change in their condition or circumstances which would justify a reduction or termination, and/or without aid-continuing benefits pending internal appeals and the issuance of Decisions After Fair Hearings. 16. The class is so numerous that joinder of all class members in this action would be impracticable. Upon information and belief, there are hundreds of persons in the class. 17. Moreover, it would be impracticable for potential plaintiffs, who are, by definition, disabled and indigent individuals, to obtain legal services on an individual basis for their claims. Hence, their rights under the law may well be meaningless without certification of a class action seeking common redress. 5

18. There are questions of fact common to the class, including whether Defendant Zucker has a custom and practice of threatening to take or taking adverse actions against members of the class without providing timely and adequate notice advising class members of the reason for the proposed action and of all information necessary to appeal such action, and whether Defendants Zucker and Proud fail to authorize and provide aid continuing to members of the class who are entitled to it. 19. There are questions of law common to the class, namely whether Defendant Zucker s custom and practice of threatening to take or taking adverse actions in the form of denials, reductions, and terminations of home care services without providing timely and adequate notice of such actions, or when there has been no change in the recipient s condition or circumstances that would justify the adverse action, violates, 42 U.S.C. 1396a(a)(3); 42 C.F.R. 42 C.F.R. 438.10; 438.210, 438.400-410; 431.211 ; New York Social Services Law 22(12); 18 N.Y.C.R.R 505.14(b)(5)(v)(c) and 358-2-2, 358-2.23, and 358-3.3; and the Due Process Clauses of the 14th Amendment to the United States Constitution, U.S. Const. Amend. XIV, 1; and of the New York State Constitution, N.Y. Const. Art. I, 6; and whether the failure by Defendants to authorize and provide required aid-continuing benefits to members of the class pending the issuance of fair hearing decisions, violates 42 U.S.C. 1396a(a)(3); 42 C.F.R. 438.420, 438.424; New York Social Services Law 365-a(8); New York Social Services Law 22(12); 18 N.Y.C.R.R 358-3.6; and the Due Process clauses of the 14th Amendment to the United States Constitution, U.S. Const. Amend. XIV, 1, and of the New York State Constitution, N.Y. Const. Art. I, 6. 20. The claims of Named Plaintiffs Janie Taylor, Eddy Lemieux, and Anibal Santiago are typical of the claims of the class in that they did not receive timely and adequate notice of the 6

reduction and discontinuance of their home care services. In addition, none of the Named Plaintiffs have had a change in their condition or circumstances that would justify the reduction or termination of their home care. Also, all three named plaintiffs have been denied aid-continuing benefits to which they were entitled. 21. Named Plaintiffs will adequately represent the interests of the class. Named Plaintiffs are members of the proposed class and there are no conflicts of interest between Named Plaintiffs and other proposed class members in that all proposed class members would benefit by obtaining timely and adequate notice of home care denials, reductions or terminations, and aid-continuing pending the issuance of DAFHs. 22. Plaintiffs are represented by the New York Legal Assistance Group ( NYLAG ). NYLAG is a public interest law firm with extensive experience in litigating class action cases, including numerous cases involving public benefits, including Medicaid funded home care services. For example, NYLAG was class counsel in Shakhnes v. Eggleston, 740 F. Supp. 2d 602 (S.D.N.Y. 2010) (certifying Rule 23(b)(2) class of Medicaid home health care recipients), aff d sub nom, Shakhnes v. Berlin, 689 F.3d 244 (2d Cir. 2012). 23. A class action is the appropriate method for a fair and efficient adjudication of this matter in that Defendants have acted or refused to act in a manner generally applicable to the class as a whole and a class action will avoid numerous separate actions by class members that would unduly burden the courts and create the possibility of inconsistent decisions, thereby making final injunctive and declaratory relief appropriate as to the class as a whole. STATUTORY AND REGULATORY SCHEME A. The Medicaid Program 24. The Medical Assistance Program ( Medicaid ) is a joint federal-state program established under Title XIX of the Social Security Act ( Medicaid Act ) that provides federal 7

funding for state programs that furnish medical assistance and rehabilitation and other services to needy individuals. 42 U.S.C. 1396 1396w-5; 42 C.F.R. 430.0 456.725. 25. States are not required to participate in the Medicaid program, but if they do, they must conform to federal law and regulations in order to qualify for federal financial participation. 42 U.S.C. 1396a, 1396c. 26. Any state participating in the Medicaid program must adopt an approved State plan, and must administer the program through a single state agency. 42 U.S.C. 1396a(a)(5); 42 C.F.R. 431.10(b)(1); State Plan Under Title XIX of the Social Security Act Medical Assistance Program (March 10, 2011). 1 27. New York has elected to participate in the Medicaid program, and the single state agency responsible for the administration of the Medicaid program in New York is the New York State Department of Health. N.Y. Soc. Serv. L. 363-a(1); 1996 N.Y. Laws Ch. 474, 233 248. This single state agency is permitted only to delegate certain functions (eligibility determinations, appeals) to certain entities (local districts), and is prohibited from delegating the authority to supervise the plan or to develop or issue policies, rules, and regulations on program matters. 42 C.F.R. 431.10(c), (e). B. Medicaid Home Care Services 28. Medicaid services include various long-term care services that are provided to Medicaid recipients to enable them to live safely in their homes, including but not limited to home health services, personal care services, the Consumer-Directed Personal Assistance Program (CDPAP), and private duty nursing collectively referred to as home care services. 1 New York State plan available at https://www.health.ny.gov/regulations/state_plans/docs/nys_medicaid_plan.pdf, with amendments at https://www.health.ny.gov/regulations/state_plans/status/. 8

29. Home health services include part-time or intermittent nursing (known commonly as visiting nurse ), home-based occupational or physical therapy, home health aide services, and medical supplies. 42 U.S.C. 1396d(a)(7); 42 C.F.R. 440.70; N. Y. Soc. Serv. L. 365- a(2)(d), 367-j; 18 NYCRR 505.23, 10 NYCRR 763.5. 30. Personal care services means some or total assistance with personal hygiene, dressing and feeding; and nutritional and environmental support functions and includes assistance with toileting, walking, transferring, and other listed tasks where such services are essential to the maintenance of the patient s health and safety in his or her own home. 42 U.S.C. 1396d(a)(24); 42 C.F.R. 440.167; N.Y. Soc. Serv. L. 365-a(2)(e); 18 N.Y.C.R.R., 505.14(a)(1), (a)(6)(ii)(a). 31. The Consumer-Directed Personal Assistance Program (CDPAP) is a variation on personal care services in which the aide may perform tasks that would otherwise be considered skilled and require a licensed nurse. Also, the Medicaid recipient or consumer has authority to select, train, and schedule her own aides. New York Soc. Serv. L. 365-f; New York Educ. Law 6908(1)(a). 32. Private duty nursing services are authorized for Medicaid recipients who need full-time skilled care, such as tube feeding, suctioning a tracheostomy or ventilator care for which a registered or licensed practical nurse is authorized to work for an entire full-time daily shift, rather than on a part-time or intermittent basis. 42 U.S.C. 1396d(a)(8); 42 C.F.R. 440.80; New York Soc. Serv. L. 365-a(2)(l). 33. All four of these types of home care services and other services meeting longterm chronic conditions must now be obtained through managed care plans as described below. C. Medicaid Managed Care and the 1115 Waiver in New York 9

34. Medicaid Managed Care Organizations ( MCOs ) are privately-owned and operated health insurance entities which contract with State Medicaid programs to provide Medicaid recipients with a package of covered services in exchange for payment by the State of an actuarially-sound capitation payment per enrollee. 42 U.S.C. 1396b(m); 42 C.F.R. 438.2, 438.6. 35. Section 1115 of the Social Security Act allows the Centers for Medicare and Medicaid Services ( CMS ) of the United States Department of Health & Human Services to waive certain otherwise mandatory provisions of the Act in order for a state to require mandatory enrollment of some or all Medicaid recipients into private managed care plans. 42 U.S.C. 1315. Waiver of the freedom of choice requirement, under Section 1902(a)(23)(A) of the Act, enables the State to require beneficiaries to enroll in managed care plans which limit their members to using a limited network of medical providers that contract with the plan. 42 U.S.C. 1396a(a)(23)(A). Waiver of the statewideness provision, under Section 1902(a)(1) of the Act, allows the state to require recipients living in certain counties of the State, but not others, to enroll in managed care plans. 42 U.S.C. 1396a(a)(1). 36. New York State has operated its Medicaid Managed Care programs through an 1115 waiver, first approved in 1997, called the Partnership Plan (Waiver # 11-W-00114/2). N.Y. Soc. Serv. L. 364-j(2)(a). See Partnership Plan Waiver Authority (CMS, as revised January 2014), available at https://www.health.ny.gov/health_care/managed_care/appextension/docs/waiver_authority.pdf; This plan waives three provisions of Federal Medicaid law: statewideness, comparability, and freedom of choice. Id. However, the authority for the waivers specifically provides that [a]ll 10

requirements of the Medicaid program expressed in law, regulation, and policy statement, not expressly waived in this list, shall apply to the demonstration... Id.; 42 C.F.R. 431.420. 37. The Partnership Plan allows the State to require most Medicaid recipients to enroll in two different types of MCOs. Since the 1990 s, most Medicaid recipients who do not also have Medicare must enroll in mainstream Medicaid managed care plans ( MMC ), and, beginning in 2012, those with Medicare who need home care services must enroll in Managed Long Term Care (MLTC) plans. Partnership Plan Special Terms & Conditions 2-3 (CMS January 2014), available at https://www.health.ny.gov/health_care/managed_care/appextension/docs/special_terms_and_con ditions.pdf. 38. Until August, 2011, home care services were carved out of the MMC service package. Those MMC members who needed home care services obtained authorizations for these services outside of the MMC plans, most commonly through their local Medicaid offices. In August, 2011, pursuant to a 2010 amendment of the Partnership Plan waiver, home care services were carved in or added to the MMC benefit package. Today, MMC plans are the only way to receive home care services for Medicaid recipients without Medicare. 39. In 2012, CMS approved New York s expansion of the Partnership waiver to require mandatory enrollment into another type of MCO called Managed Long-Term Care ( MLTC ). N.Y. Pub. Health L. 4403-f. Although MLTC plans existed since 1997, they were strictly voluntary. The 2012 amendment of the Partnership waiver allowed DOH to require adult Medicaid recipients who also had Medicare ( dual eligibles ) to enroll in MLTC plans in order to receive Medicaid-covered home care services. Id. at 2-3. 40. CMS approval of an 1115 waiver or its expansion is conditioned on the State s 11

compliance with a set of Special Terms and Conditions (STC s). 2 41. Defendant Zucker has entered into a contract with each MCO pursuant to which MCOs provide home care services to Medicaid recipients. 42. These contracts require that the MCOs comply with all applicable federal and state statutes and regulations. 43. Medicaid MCOs must make Medicaid services included within their benefit package available to the same extent they are available to recipients of fee-for-service Medicaid. 42 U.S.C. 1396b(m)(1)(A)(i). 44. State contracts with MCOs must require that the services... be furnished in an amount, duration, and scope that is no less than the amount, duration, and scope for the same services furnished to beneficiaries under fee-for-service Medicaid, as set forth in 440.230. 42 C.F.R. 438.210(a)(2). The contracts must further ensure that the services are sufficient in amount, duration, or scope to reasonably be expected to achieve the purpose for which the services are furnished. 42 C.F.R. 438.210(a)(3)(i). 45. State contracts with MCOs must specify what constitutes medically necessary services in a manner that (i) Is no more restrictive than that used in the State Medicaid program as indicated in State statutes and regulations, the State Plan, and other State policy and procedures. 42 C.F.R. 438.210(a)(4)(i). 46. The Special Terms and Conditions for the 1115 Waivers provides that [b]enefits provided through this Demonstration for the mainstream Medicaid managed care program are 2 The CMS Approval Letter and the Special Terms and Conditions Partnership Plan are posted at http://www.health.ny.gov/health_care/medicaid/redesign/1115_waiver_amendment_for_managed_long_term_care.h tm. Amended Special Terms and Conditions available at http://www.health.ny.gov/health_care/managed_care/appextension/docs/special_terms_and_conditions.pdf. 12

identical to those in the Medicaid state plan. Partnership Plan Special Terms & Conditions 21 (CMS January 2014). D. Notice and Appeal Rights in Medicaid and Medicaid Managed Care 47. Federal law and regulations require a state s Medicaid program to provide Medicaid applicants and recipients with recourse to an administrative fair hearing when Medicaid benefits are denied, reduced, or terminated. 42 U.S.C. 1396a(a)(3); 42 C.F.R. 431.220. 48. When determinations are made to deny, reduce, or terminate Medicaid, applicants and recipients must be given timely and adequate notice of their right to a fair hearing. 42 U.S.C. 1396a(a)(3); 42 C.F.R. 435.919, 435.912, 431.206(b), 431.206(c), 431.210; N.Y. Soc. Serv. Law 22(12); 18 N.Y.C.R.R 505.14(g)(3)(x). 49. When determinations are made to reduce or terminate Medicaid benefits, recipients who request a fair hearing in a timely manner are entitled to receive their benefits unchanged (called aid-continuing ) until a Decision After Fair Hearing ( DAFH ) is issued. 42 U.S.C. 1396a(a)(3); 42 C.F.R. 431.230(a), 431.231(c), 438.420(b); N.Y. Soc. Serv. Law 365-a(8); 18 N.Y.C.R.R. 358-3.6, 505.23(d); U.S. Const. Amend. XIV, 1; N.Y. Const. Art. I, 6. 50. Medicaid MCOs are required by Federal law and regulation to have a grievance and appeal procedure, including the right to challenge a denial of coverage. 42 U.S.C. 1396u- 2(d)(2)(c); 42 C.F.R. 438.400 438.424 51. When an MCO takes an action (defined to include a denial or limited authorization of a requested service; and a reduction, suspension, or termination of a previously authorized service), it must send a written notice to the enrollee explaining the action, the 13

reasons for the action, the right to appeal, the procedures for appealing, how to request expedited resolution, and the right to continuation of services pending the appeal. 42 C.F.R. 400(b)(1-2), 438.404(a). 52. Whether the notice of action must be given in advance of the proposed action depends on whether the action is a denial of a new service, or a reduction of a previously authorized service. The notice of action regarding a denial or limited authorization of a new requested service must be provided to the enrollee as expeditiously as the enrollee's health condition requires and within State-established timeframes that may not exceed 14 calendar days following receipt of the request for service, with a possible extension of up to 14 additional calendar days... 42 C.F.R. 438.404(c)(3), 438.210(d)(1). For service authorizations where a provider indicates, or the MCO... determines, that following the standard timeframe could seriously jeopardize the enrollee's life or health or ability to attain, maintain, or regain maximum function, the notice may be provided no later than three working days after the request for service, also subject to a possible 14-day extension. 42 C.F.R. 438.210(d)(2). 53. In contrast, the notice of action regarding a reduction, suspension, or termination of a previously authorized service must be sent by the MCO at least ten days before the date of the proposed action. 42 C.F.R. 438.404(c)(3), 431.211 (this is the same regulation governing fee-for-service Medicaid 54. In mainstream MMC plans, defendant Zucker s policy allows plan members to appeal an adverse determination either by requesting an internal appeal within the plan or by requesting a fair hearing. Exhaustion of the internal appeal procedure is not required as a precondition of requesting a fair hearing. Aid continuing must be provided upon a timely request 14

either for an internal appeal or fair hearing, but if an MMC plan denies an internal appeal, defendant Zucker fails to require advance notice and aid continuing pending a fair hearing. 55. In MLTC plans, defendant Zucker s policy requires exhaustion of internal appeals within the plan as a pre-condition of requesting a fair hearing. 56. MCOs are required to give enrollees reasonable assistance in taking the procedural steps required for filing grievances and appeals, must allow appeals to be filed orally, must provide an opportunity for presentation of evidence and legal/factual allegations in person or in writing, and provide an opportunity to examine the case file. 42 C.F.R. 438.406. FACTS OF THE INDIVIDUAL NAMED PLAINTIFFS Named Plaintiff Janie Taylor 57. Janie Taylor is an 84 year-old woman who lives alone in Harlem and receives Medicaid. 58. Ms. Taylor has been authorized to receive Medicaid home care services in the amount of 10 hours per day, 7 days per week since 2011. 59. She suffers from numerous medical conditions including diabetes, hypertension, unsteady gait, and high blood pressure. 60. Because of her medical conditions she needs assistance with many of her daily activities of living, including all mobility and transferring, preparing all meals, shopping, bathing, dressing, and household chores. 61. Ms. Taylor has a mobility impairment and needs assistance from another person to safely move about inside her apartment as well as outside. While she is able to walk very short distances, for example across a room, at a very slow pace, she has an unsteady gait and if she walks without a person to support her and provide contact guarding, she is at risk of falling. 15

An aide s assistance ten hours per day is critical to enable her to safely engage in her basic daily activities, including going to the bathroom and preparing meals. 62. In March 2013, Ms. Taylor was mandatorily enrolled in VNS CHOICE MLTC plan. The plan initially maintained her home care in the amount of 10 hours per day, 7 days per week as previously authorized by the local social services district HRA. 63. Ms. Taylor received that amount of home care from VNS CHOICE until July 1, 2014, when VNS CHOICE reduced her services without notice to 5 hours per day, 7 days per week. 64. On June 23, 2014, Ms. Taylor received a document entitled Summary of Authorized Services from VNS Choice. The document is dated June 19, 2014. 65. The document states that Ms. Taylor is authorized to receive home care for the period of July 1, 2014 through December 31, 2014, in the amount of 5 hours per day, 7 days per week. 66. Although this authorization for care is for an amount that is one half of what she previously had been receiving, the document does not purport to reduce her care; rather it states that it is a new authorization. 67. The document does not advise Ms. Taylor of her right to an internal appeal, or a fair hearing, or aid-continuing. 68. The document does not include a reason for the reduction in care. 69. There had not been any change in Ms. Taylor s condition or circumstances. 70. On or about June 30, 2014, a social worker at the office of Ms. Taylor s physician contacted VNS Choice and requested an internal appeal to challenge the threatened reduction of her home care services. 16

71. On July 1, 2014, Ms. Taylor was notified by VNS by telephone that the internal appeal was denied, and that a notice would be sent soon, but that her care would be reduced to the new lower amount, effective July 1 st. On July 1 st, her aide left after working 5 hours. Since July 1, 2014, she has received only 5 hours per day, 7 days per week. 72. On July 1, 2014, Ms. Taylor contacted NYLAG, which advised her of her right to request a fair hearing. 73. On July 1, 2014, NYLAG requested a fair hearing for Ms. Taylor. 74. On July 2, 2014, NYLAG telephoned Defendant Proud and after learning that the fair hearing request had not yet been processed, requested that it be processed immediately. 75. On July 2, 2014, Defendant Proud processed the request for a fair hearing and ordered aid-continuing. 76. Despite this aid-continuing directive from Defendant Proud, VNS Choice has not restored Ms. Taylor s care to the full amount of 10 hours per day, 7 days per week. 77. Before her care was reduced, Ms. Taylor s aide arrived at 9am, and stayed until 7pm; now her aide arrives at 9am and leaves at 2pm. 78. Before her care was reduced, Ms. Taylor s aide prepared her dinner, cleaned up, and helped her use the bathroom and prepare for bed. Now Ms. Taylor must complete these tasks alone, and because she is so unsteady on her feet, she is at constant risk of falling. Because she cannot prepare her own meals, she must eat cold dinners every night, left out for her several hours earlier by her aide. Because she cannot go outside unassisted, she now is unable to leave her apartment after 2pm. 79. On or about July 7, 2014, Ms. Taylor received a letter from VNS Choice dated July 2, 2014, entitled Notice of Action Denial of Benefits. It does not state an effective date. 17

Ms. Taylor made no request for an increase in benefits, and the notice mischaracterizes a determination to reduce care as a denial of a request for an increase. 80. In the section of the July 2 nd letter, which she received 6 days after her care was reduced, entitled Type of Benefit and Summary of Request, the letter states: Home health aide hours-request for increase of current hours from five (5) hours/ seven (7) days per week to ten (10) hours/seven (7) days a week. In the section entitled Reason for Denial, the letter states: The request for ten (10) hours of home health aide service, seven (7) days per week is denied. Based on the clinical assessment, the current level of service of five (5) hours, seven (7) days per week is adequate to meet your functional and personal care needs. Additional hours would be for safety supervision and/or companionship which are services not covered which are services not covered by VNSNY CHOICE Managed Long Term Care. 81. It is not true that the only reason Ms. Taylor needs more than 5 hours per day is to provide her with safety supervision and companionship. Ms. Taylor needs assistance with meal mobility, meal preparation, and personal hygiene tasks associated with preparing for bed. Named Plaintiff Eddy Lemieux 82. Eddy Lemieux is an 18 year-old male who receives Medicaid and lives with his aunt and severely disabled uncle in Brooklyn. 83. Mr. Lemieux suffers from multiple medical conditions including Noonan s syndrome, a congenital disease, with related diagnoses of pulmonary stenosis, severe scoliosis, lymphedema, bone disease, congenital pulmonary stenosis, and pulmonary insufficiency. 18

84. Because of these conditions, Mr. Lemieux is extremely weak and frail and needs assistance to complete all of his daily activities including walking, transferring, bathing and other personal hygiene activities, medication administration, and going to the bathroom. 85. Mr. Lemieux s uncle receives home care as well, and is too disabled to care for him. Mr. Lemieux s aunt works two jobs, one of them at night, to support the family, so she cannot take care of him either. 86. In order for Mr. Lemieux to remain in the community, he requires 24 hour-perday continuous care. On weekdays, he attends a special school where he is cared for, but the rest of the day and nights, he needs a personal care aide. 87. Mr. Lemieux was originally authorized to receive home care through the CDPAP program, which was formerly administered by the local Medicaid district in New York City. 88. For many years Mr. Lemieux was authorized to receive 24 hour-per-day continuous home care in two 12-hour shifts. 89. In 2012 Mr. Lemieux was required to enroll in Healthfirst, which assumed control of his Medicaid home care services. 90. On January 14, 2014, Healthfirst sent Mr. Lemieux a document which, though lacking any title, purported to be a notice of authorization for consumer-directed personal care services which would be tapered as follows, 12 hours 7 days per week for 4 weeks then 8 hours, 7 days per week for 4 weeks, then 5 hours, 3 days per week for 4 weeks, then discontinue services. The reduction was slated to begin on January 25 th, with the reduction to 12 hours/day, then on February 23rd to 8 hours, then on March 24 th to 5 hours, then discontinuance on April 22, 2014. 19

91. Although the notice has no title at all, let alone any indication that it is a notice of reduction and discontinuance, in the body of the text it notes that Healthfirst has reviewed the request for Personal Care Service 24 hours 7 days a week. The notice goes on to say it has been determined that the requested service(s) is not/are no longer medically necessary because after review of the clinical information provided the Medical Director has determined that the amount of/level of Personal Care Services requested is not medically necessary. 92. The January 14, 2014 notice did not identify any change in Mr. Lemieux s medical condition or social circumstances, or any other change which might explain why an individual who had previously been found to need 24 hour-per-day continuous care could be tapered to no care at all over the course of 12 weeks. 93. There had been no change in Mr. Lemieux s medical condition or circumstances. 94. The notice is six pages long and densely formatted. Information about requesting an internal appeal is on pages two and three. Information about requesting a fair hearing and the right to aid-continuing is on page four, but with no information on how to request a hearing. The notice references a separate Managed Care Action Taken form for instructions on requesting a fair hearing, which was not attached to the notice mailed. 95. In response to this notice, Mr. Lemieux s aunt requested an internal appeal through Healthfirst. 96. She requested the internal appeal before January 25 th, the effective date of the notice, and as a result, Mr. Lemieux was entitled to aid-continuing, which meant continuation of continuous 24-hour care in two 12-hour shifts pending the internal appeal decision. If that decision was adverse, Healthfirst should have provided notice again, affording him the opportunity to request a fair hearing with aid continuing. 20

97. Healthfirst did not acknowledge that an appeal had been requested, nor did it give Mr. Lemieux an opportunity to submit documents to be considered during the appeal. 98. On January 27, 2014, Healthfirst sent a Notice of Final Adverse Determination which contained its determination to uphold the Denial of Personal Care Services, 24 hours x 7 days per week but it also modified the authorization and determined to approve Mr. Lemieux to receive personal care services in the amount of 12 hours-per-day for 6 weeks, and then to reassess. 99. The January 27 th notice was not timely, as it was not provided ten days in advance of the proposed reduction to 12 hours per day. Instead, the January 27 th notice purported to reduce services retroactively to 12 hours-per-day effective January 24 th. In effect, this affirmed the first step of the initial tapered reduction announced in the January 14 th notice, which was to reduce hours to 12 per day on January 25 th. Thus the decision on the internal appeal sustained the initial step of the tapered reduction, and canceled the subsequent reductions subject to reassessment in six weeks. 100. Contrary to the decision on the appeal, Healthfirst in fact proceeded with the rapid taper reduction as proposed in its original notice. 101. The January 27 th notice stated that services were not medically necessary because Mr. Lemieux is not homebound, is alert, and has not been recently hospitalized, because his family has learned to use the continuous positive airway pressure and other equipment, because he has no skilled needs, and because the goal is to help the member become independent. None of these statements describe a change in Mr. Lemieux s condition or circumstance that would justify a reduction in his care, because none of them describe anything new. 21

102. On February 7, 2104, Mr. Lemieux requested a fair hearing to challenge the reduction of his services from 24 hour split shift, to 12 hours-per-day. 103. Defendant Proud did not order aid-continuing. 104. As a result, Mr. Lemieux s home care was not restored to 24 hour split shift care as it should have been. 105. Mr. Lemieux was referred to NYLAG on April 21, 2014. 106. On April 23, 2014, a NYLAG lawyer called Defendant Proud and inquired why aid-continuing had not been directed, and was told that it was an error, and that Defendant Proud had corrected it, and had so informed Healthfirst. 107. On April 25, 2014, Healthfirst reauthorized Mr. Lemieux for home care, but only for 24 hour-per-day sleep in not 24 hour-per-day split-shift care, as required by the aid - continuing order. 108. Moreover, that authorization was only to provide services for ten days -- from April 25, 2014 through May 5, 2014. 109. Between April 25 and May 5, Mr. Lemieux received 24 hour sleep-in care. 110. On May 6, 2014, Mr. Lemieux s home care was discontinued in its entirety despite the aid-continuing directive issued by Defendant Proud and despite Healthfirst s own rescission of its original determination to discontinue services altogether. 111. On that day, because Mr. Lemieux s aunt had to work, he was left alone with only his uncle and his uncle s home attendant to care for him, even though she was not supposed to be caring for Mr. Lemieux. 22

112. On May 7, 2014, as a result of advocacy by NYLAG, Healthfirst authorized care to begin again, in the amount of 24 hour-per-day, sleep in care. This time the authorization ran through July 5, 2104. 113. On May 19, 2014, as a result of advocacy by NYLAG, Healthfirst increased the authorization to 24 hour continuous care, still only through July 5, 2014. 114. Healthfirst subsequently reauthorized 24 hour split-shift care through September, 2014. 115. The fair hearing is still pending. Named Plaintiff Anibal Santiago 116. Anibal Santiago is a 65 year-old man who lives alone in Manhattan and receives Medicaid. 117. Since he does not have Medicare, he has been enrolled in a mainstream Medicaid managed care plan, Healthfirst, since 2007. 118. He suffers from numerous medical conditions including diabetes, high blood pressure, and schizoaffective disorder. Because of his medical condition he needs assistance with many of his daily activities including all outdoor mobility, housekeeping, cuing and prompting regarding personal hygiene, and meal preparation. 119. In particular Mr. Santiago needs assistance from another person with preparing his diabetic diet meals which he is unable to prepare for himself. This involves shopping, preparing the meals, and managing his portions of both food and liquids. 120. Prior to April, 2014, for about 3 years, Mr. Santiago received home care services in the amount of 12 hours per day, 7 days per week, as authorized by Healthfirst. 23

121. On April 2, 2014, Healthfirst sent a notice to Mr. Santiago purporting to deny his so-called request for personal care services 12 hours per day, 7 days per week, and approving him to receive personal care services 4 hours per day, 7 days per week. 122. Although the April 2 nd notice is effectively a reduction notice, it is not identified as such, and does not use the word reduction; rather it states that services are approved at the decreased amount. It does not give any reason why services were being reduced, nor any explanation of how a person whom they had previously determined needed 12 hours per day, 7 days per week, could now be cared for with only 4 hours per day, 7 days per week. 123. There has been no change in Mr. Santiago s condition. 124. The two-page notice Mr. Santiago received explains how to request an internal appeal but provides no information about requesting a fair hearing or the right to aid continuing. 125. On April 7, 2014, Healthfirst sent an additional notice to Mr. Santiago with the heading MANAGED CARE ACTION TAKEN TERMINATION OR REDUCTION IN BENEFIT. 126. While this notice does more clearly purport to be a reduction notice, it is very difficult to read because it is half in English and half in Spanish, and alternates between the two languages in the middle of sentences. For example, the first sentence of the text reads This is to inform you/la siguente es para informarie que su Personal Care Assistance Level II, 12 hours 7 days a week will be/sera Reduced to/reducido 4 hours 7 days a week effective/a partir de 05/03/2014 because/debido a: the request for continued Personal Care Assistance services are approved at the decreased rate of 4 hours/day 7 days/week. 127. This notice states as the reason why his services were being reduced that the medical documents... show you are independent with your personal care. The personal care 24

assistance benefit is intended to assist members who cannot accomplish the activities of daily living by themselves; it is not intended solely as supervision. The notice fails to state any change in his medical condition or circumstances that might explain how a person previously determined to need 12 hours per day, 7 days per week for over three years could now be cared for with only 4 hours per day, 7 days per week. 128. There has not been any change in Mr. Santiago s condition or circumstances. His needs have been and continue to be far beyond mere supervision. 129. On or about April 22, 2014, Mr. Santiago filed an internal appeal to review the determination to reduce his personal care services. 130. On May 2, 2014, Healthfirst sent a letter and notice to Mr. Santiago. Both inform him that Healthfirst has reviewed his appeal, and determined to approve him to receive personal care services 8 hours per day, 7 days per week. 131. Neither the letter nor the notice state an effective date for the reduction to 8 hours per day, but the notice states that the date span is May 3, 2014 through August 20, 2014, therefore the de facto effective day of the notice is 1 day after the date it was mailed. 132. On May 3, 2014, Mr. Santiago s care was reduced from 12 hours per day to 8 hours per day. 133. On May 12, 2014, Mr. Santiago requested a fair hearing to challenge the reduction of his personal care service. Defendant Proud processed the request but did not order aid-continuing. As a result, Mr. Santiago s care remained reduced for over a month. 134. On June 9, 2014, a NYLAG attorney called Defendant Proud and questioned why aid-continuing had not been ordered. As a result of that phone call, Defendant Proud ordered aid-continuing and Healthfirst has complied with that order. 25

135. Mr. Santiago s fair hearing is scheduled for July 21, 2014. FACTS CONCERNING THE CLASS 26

136. Medicaid recipients who need assistance with the activities of daily living who, for example, cannot perform essential life activities such as bathing, dressing, walking, toileting, or eating on their own depend on Medicaid-funded care from an aide or nurse in order to remain safely in their own homes, rather than having to permanently reside in a Medicaid-funded nursing home or other institution. 137. Historically, in New York State, most Medicaid-funded home care services were authorized by the local Departments of Social Services, such as the Human Resources Administration ( HRA ) in New York City. 138. Currently, the New York State Medicaid program provides almost all Medicaidfunded home care services through some type of managed care, either a Mainstream Managed Care (MMC) plan or a Managed Long Term Care plan (MLTC), collectively Managed Care Organizations ( MCOs ). 139. After New York State received its 1115 waiver, participation in MLTC was first made mandatory in New York City in September 2012, and Long Island and Westchester followed in the next six months. Six more counties were added in 2013, at least eight more counties were added so far in 2014, and the rest of the state is scheduled to be phased in throughout 2014. 140. Individuals in mandatory counties who are eligible for both Medicare and Medicaid ( dually eligible ), over 21 years old, and in need of more than 120 days of home care services must enroll in an MLTC in order to receive Medicaid-funded home care services. In counties that are not yet mandatory, Medicaid recipients with Medicare continue to access home care services through their local social services districts. Those who do not have Medicare must access home care through a mainstream MMC plan. 27

141. As of April 2014, there were 115,674 individuals in New York State enrolled in MLTC plans. In New York City, enrollment in MLTCs increased to 103,697 individuals in April 2014 as compared to 45,634 in April 2012. 142. A smaller statewide group of about 10,000 Medicaid-only recipients receive home care services through a mainstream MMC plan. 143. Members of the class, all of whom need home care services in order to live safely in the community, are very vulnerable. By definition, they cannot manage alone. They have multiple chronic conditions many of which are degenerative - and do not improve - such as Multiple Sclerosis and Alzheimer s disease, and require long-term care services for basic activities of daily living including ambulation, toileting, and cooking. 144. Pursuant to his obligations under the Medicaid Act and its implementing regulations, as well as the federal 1115 waiver, Defendant Zucker included in his contracts with MLTCs and MMCs the obligation to comply with the Medicaid Act and its implementing regulations and state law and regulations in their processes to assess, authorize, deny, reassess, reauthorize, increase, reduce, terminate and discontinue Medicaid-funded home care services for Medicaid recipients enrolled in each plan. 145. Defendant Zucker routinely fails to provide timely and adequate notices and opportunities for Fair Hearings to members of the plaintiff class and Defendants Zucker and Proud routinely fail to authorize and provide aid-continuing. 146. MCO members have the right to request an internal appeal in which the plan will review the correctness of its own determination. Under defendant Zucker s policy, MMC members have the option of requesting an internal appeal or proceeding directly to a fair hearing. If they initially request an internal appeal and lose, they may still request a fair hearing. The 28

internal appeal does not toll the MMC member s time frame to request a fair hearing. An MMC member who opts to request an internal appeal and loses can then be denied a fair hearing if the hearing request was filed more than sixty days after the plan s initial adverse determination. 147. Defendant Zucker routinely fails to provide notices that adequately explain that requesting an internal appeal will not toll the time period to request a fair hearing. 148. Unlike mainstream MMC members MLTC members must request an internal appeal as a pre-condition of requesting a fair hearing. 149. Defendant Zucker routinely fails to provide notices that adequately explain the exhaustion requirement. 150. When an MLTC or MMC plan denies an internal appeal, this triggers the need to issue a second notice. This notice must include, among other requirements, an explanation of the outcome of the internal appeal, the reasons for the decision, and the recipient s right to request a Fair Hearing and to receive aid continuing until a DAFH is issued from an Administrative Law Judge. This notice, like the initial notice, must be timely it must be provided in advance of the proposed reduction, to afford the opportunity to request a fair hearing with aid continuing. Defendant Zucker routinely fails to provide or ensure timely notice after an internal appeal. 151. Defendants Zucker and Proud, have a custom and practice of routinely failing to take one or more and sometimes all of the steps required by law and regulation when denying requests for new services, increases of current home care services or threatening reductions or terminations of such services, and in the administration of the fair hearings challenging such determinations. 29

152. Defendant Zucker has a custom and practice of routinely failing to issue timely and adequate notice, or any written notice at all, before reducing or terminating home care services. Many class members only receive a phone call, or are told by a nurse or care manager that services are being reduced or terminated. Without notice many recipients do not even know they have the right to appeal, let alone navigate the applicable appeals procedure to maintain critical home health services. 153. When some written notice is provided, Defendant Zucker has a custom and practice of routinely failing to provide such notice at least 10 days prior to the date of the intended action as required by law and regulation for reductions or terminations of home care services. 154. When some written notice is provided, Defendant Zucker has a custom and practice of routinely failing to provide notice of adverse actions that is adequate. These notices frequently do not include an appropriate explanation of the legal and factual basis justifying the denial, reduction, discontinuance of services, an explanation of their rights to appeal and to aid continuing, an explanation of internal appeals and how requesting them or failing to request them impacts the right to a fair hearing. 155. Defendant Zucker has a custom and practice of routinely failing to issue timely and adequate notices of reductions, terminations, or discontinuances of home care services with aid continuing rights. Instead of notices giving advance warning of a reduction or termination in services, MCO notices routinely mischaracterize the plans actions as a mere authorization for services, or as denial of requests for an increase in services. This distinction is critical, as plaintiffs whose services are reduced or terminated have the right to request an appeal with aid continuing, while an individual appealing a denial of a new or increased service or of a mere 30